The Starting Point of Business
I read several books over the New Year holidays, and here I would like to introduce one of them that especially impressed me – Shobai no genten (The Starting Point of Business) by Toshifumi Suzuki, the chairman of Seven-Eleven Japan Co. In the book, which brings together his speeches made in weekly meetings over 30 years, Suzuki lectures strongly about what business should be like.
Suzuki states again and again that there are four principles behind good business: freshness management, product lineup, friendly service, and cleanliness. If a store neglects these four principles even a little, it will go under. Why? Because there will be a deterioration in store loyalty and store image. Store loyalty means reliability, familiarity, expectation, and satisfaction. It is store loyalty that builds up store image. So a store’s strict observance of the four principles is connected to its survival.
If we shift the four principles to the household electric appliance distribution industry, we can see that they apply here as well.
Freshness management, of course, means responding to new products. Putting new products on display faster than other stores is a factor in increasing profitability. Accordingly, a store’s relations with makers, who are the suppliers of products, must be friendly. It is important to share information about products from the planning stage and to stick by the principle of selling all your stock and not returning anything. In that way, relations of trust with makers will be strengthened, and makers will supply their leading products to that store ahead of others.
The main points here are how to sell products while they are still fresh, where to set the deadline for freshness, and how quickly you can dispose of products that have run out of freshness. Freshness management is important in product lineup, too. Stores must arrange customer-oriented product lineups that offer just what the customer wants and sell products while they are still fresh.
For this purpose also, the principle of friendly service is important. Customers go through a psychological stage before moving onto the purchasing mode. At this psychological stage, whether or not they decide quite naturally on the store where they will make their purchase is extremely important. Needless to say, they are going to head for the store that guarantees friendly service.
And finally, cleanliness is a must. Customers are disgusted when they see, for example, balls of dust in the corners on a store’s staircase. They are not going to want to shop at a store where the products have dirty tops. Consciously and unconsciously, customers choose the stores that they go to.
Furthermore, Suzuki cautions sternly that “the search for cheapness stems from a lack of understanding of the essential nature of business.” In contrast to hot-selling products, a store must recognize deadwood items, get rid of them, and stock up with hot-selling ones. For this purpose, says Suzuki, it is important to thoroughly practice the fundamental approach of single-article management and also to control expenses.
The establishment of such a setup is essential. Shuichi Kato, the president of K’s Denki Corp., often says that his company does not need to overexert itself. Reading Suzuki’s book, I got the feeling that the only reason he can only say such a thing is that his company has indeed established a mechanism that includes these four principles.